Talks between the Russian President, Mr Vladimir Putin, and the German Chancellor, Mr Gerhard Schroder, failed to reach agreement on the key issue of Russia's debt to Germany.
After an informal day in St Petersburg on Monday, in which the main event was a symbolic visit by Mr Schroder to a Russian war cemetery, talks between the two leaders began yesterday but produced little.
Arms reduction was to have been a major item in the discussions, with Russia strongly opposed to President Bush's National Missile Defence system. No mention of the issue was made at the leaders' joint press conference.
Mr Sergei Prikhodko, the Kremlin's spokesman on foreign affairs, announced after the meeting that no agreement had been reached on debt and further discussions between teams of experts from both countries would be necessary.
On the broader issue of rescheduling Russia's entire foreign debt, Mr Schroder told the independent radio station Ekho Moskvy that Germany was prepared to help in this area.
"If there are problems with repayments in 2003-2004, we are ready to help in considering debt-restructuring," he said. But although Russia's debt repayments are expected to rise to $18 billion in 2003, Mr Schroder said Russia was capable of repaying its debts and should do so in order to keep its credit rating intact.
Mr Schroder's choice of Ekho Moskvy for his major interview of the visit was an interesting one. It is a sister station of the beleaguered NTV television channel owned by Mr Vladimir Gusinsky, the sole Russian oligarch who opposed Mr Putin in last year's presidential election.
Mr Gusinsky had been imprisoned then released after the dropping of charges against him and then had the charges reinstated. He is now in exile in Spain, contesting extradition moves. A controversial take-over by the pro-government natural gas monopoly, Gazprom, threatens to end all major media opposition to Mr Putin and led to large demonstrations in Moscow and St Petersburg last Saturday and Sunday.
This issue was raised by Mr Schroder in the course of the discussions, but on Monday Mr Putin stressed that he had no role to play in the issue, which would be decided by the courts.
The NTV issue was also raised in Luxembourg yesterday when EU officials expressed concern for press freedom to the Russian Deputy Prime Minister, Mr Viktor Khristenko.
The EU's External Affairs Commissioner, Mr Chris Patten, expressed "profound disappointment" at lack of progress in dealing with environmental problems.
In a separate development in Geneva yesterday, Mr Pavel Borodin, who brought Mr Putin to the Kremlin from St Petersburg, was taken to hospital with suspected heart problems.
Mr Borodin, arrested in New York in January, has been indicted in Switzerland on charges of money-laundering and membership of a criminal organisation.
